Micron: DRAM supply tighter through 2028, prices rising

Micron's datacenter DRAM business ran at a 90 percent gross margin in its fiscal fourth quarter, up from 41 percent a year earlier. Cloud memory, the segment that includes HBM for AI accelerators, came in at 83 percent, up from 59 percent.

CEO and chair Sanjay Mehrotra told investors the squeeze is not easing. "In calendar 2027 as well as 2028, we see demand exceeding supply," he said on the earnings call, as reported by The Register. "In fact, we see greater tightness in the industry in 2027 and in 2028 versus 2026."

Customers will pay "much higher prices" than they did this year, he added. Most of Micron's 2027 production is already sold. "We do not have line of sight to when supply and demand will return to balance."

New factories come online in 2028. In the meantime Micron plans $25 billion of capex in the first half of its new fiscal year, and guided Q1 revenue to $61.5 billion plus or minus $1.5 billion, with gross margin forecast at 86.25 percent.

Mehrotra also framed the HBM roadmap in explicit customer-partnership terms: "We have a strong roadmap for future HBM products and are proud to be working with NVIDIA on the industry's first custom HBM4E implementation, NV-HBM, to be adopted on next generation of GPUs and NVLink fusion platforms."

The matching Q4 revenue print landed on our feed yesterday.